Sunday, May 13, 2012

One of our favorite gloomsters, Ambrose Evans-Pritchard (I once said his writing "runs the gamutfrom despondent to suicidal'), does his "Little ray of sunshine" bit by using the word 'slump' in place of apocalypse or catastrophe or...
From the Telegraph:

All key indicators of China's money supply are flashing warning signs. The
broader measures have slumped to stagnation levels not seen since the late
1990s.

Narrow M1 data for April is the weakest since modern records began. Real M1
deposits – a leading indicator of economic growth six months or so ahead –
have contracted since November.

They are shrinking faster that at any time during the 2008-2009 crisis, and
faster than in Spain right now, according to Simon Ward at Henderson Global
Investors.

If China were a normal country, it would be hurtling into a brick wall. A "hard-landing"
later this year would already be baked into the pie.

Whether this hybrid system of market Leninism – with banks run by Party bosses
– conforms to Western monetary theory is a hotly contested point. The
issue will be settled one way or the other soon.

What seems clear is that China's economy did not bottom out as expected in the
first quarter. It is flirting with real trouble. Yao Wei from Societe
Generale says a blizzard of awful data "screams out for easing"

China's electricity output – watched religiously by bears – slumped in
April. It is up just 0.7pc over the last year. State investment in railways
has fallen 44pc, with an accelerating downward lurch over recent months.
Highway construction has dropped 2.7pc. "The data shows extreme
weakness in the Chinese economy," said Alistair Thornton from IHS
Global Insight in Beijing....MORE

It's probably better that Chinese rail investment is down, their high speed trains seem to have a problem with crashing.
The People's Bank of China cut their reserve requirements on Saturday.
That "faster than Spain" line does focus one's attention though.